1. Field of Invention
This invention relates to scheduling systems, specifically to such systems which are used for scheduling construction projects.
2. Description of the Prior Art
A crucial factor for construction contractors to run profitable business represents the ability to timely procure adequate fund to execute construction activities with minimum financing cost. During any period of a project, contractors will never carry out any activity the available finance can not afford despite the obligation to adhere to the project schedule. This explicit principle of operation makes the establishment of a balance, along project duration, between activities' disbursement and available finance a very vital concept to produce a realistic schedule of project activities.
The establishment of bank overdrafts has been one of the prevalent methods of financing construction projects. Practically, contractors establish a bank overdraft with a specified credit limit to finance a new project. Then, they proceed with the execution of project activities such that the disbursements during any period, week or month, will never cause negative cash flow to exceed the credit limit of the established overdraft. An additional component of financing during a period represents a receipt collected as a reimbursement for work performed during a previous period of the project. Contractors usually deposit these components in the overdraft account to avoid that the negative cash flow reaches the credit limit and also to reduce the financing cost. Accordingly, contractors are always interested in developing schedules that make project negative cash flow never exceeds the specified credit limit. Since this concept of scheduling is based on finance availability, it can be referred to as finance-based scheduling.
There are many techniques that were developed in the literature to schedule construction projects based on different concepts. CPM/PERT scheduling techniques were developed with an underlying concept of minimizing the project duration. Subsequently, many algorithms have been developed to enhance their usefulness. Among these algorithms, resource management techniques offer a substantial enhancement. The literature involves many heuristic, optimal and sub-optimal methods that have been developed to modify CPM/PERT schedules in account of practical considerations of project resources. Despite the fact that money is a major construction resource, none of the resource management techniques considered the modification of CPM/PERT schedules to balance the project expenditures with the available finance along the project duration.
Generally, traditional resource management models with the available finance treated as a constrained resource can not be considered as a substitute for the proposed finance-based scheduling method. This is due to the fact that part of the finance available during a given period is generated as a reimbursement for a work that was performed during a previous period of the same project. Thus, a complete profile of finance available along the project duration, which is a required input to these models, can not be readily established.
On the other hand, resource-oriented scheduling techniques including line of balance (LOB) and linear scheduling method (LSM) are underlied by the concept of efficient use of resources. Operating under this concept necessitates the practice of some sort of central control over resources. As a matter of fact, central control over resources might exist in the military or job shop scheduling in a factory, but does not exist in construction projects. Instead, contractors and subcontractors allocate resources mainly based on the availability of finance. They determine the pace of work considering the efficient use of resources provided that finance availability constraint is fulfilled.
As outlined before, although many techniques were developed to schedule construction projects, these techniques suffer from a number of disadvantages:    1—None of the present scheduling techniques includes in its underlying concept or algorithm any consideration for the establishment of a balance between the disbursement of the scheduled activities and the available finance during a given period. Consequently, the available scheduling techniques are possibly to produce financially nonrealistic schedules.    2—None of the present scheduling techniques shows how to develop schedules that correspond to overdrafts of desired credit limits. Lack of control on overdraft credit limits hinders contractors to negotiate good deals in obtaining bank overdrafts.    3—None of the present scheduling techniques relates the schedules of all existing and planned projects, In case of a contractor implementing many projects simultaneously, to the overall liquidity situation of the contractor.    4—None of the present scheduling techniques can help owners ask for a schedule that produces a desired progress payment requirements scheme that serves his financial interests.Objects and Advantages:
Accordingly, several objects and advantages of my finance-based project scheduling system are:    1—Establishes financial feasibility in the scheduling process by simultaneously relating the disbursements of scheduled activities during periods to the finance available in the corresponding periods. In other words cause the negative cash flow always undervalues the specified credit limit.    2—Enables developing schedules that correspond to overdrafts of desired credit limits. The control on overdraft credit limit provides many benefits including:            Negotiating lower interest rates with banks,        Setting favorable terms of repayment,        Reducing penalties incurred for any unused portion of an overdraft.        Avoiding the phenomenon of spiraling down. This situation occurs when the finance available in a given period does not allow scheduling much work. During the next period at which a reimbursement is expected, the generated income will allow scheduling less work, and so forth.            3—Relates schedules of all existing and planned projects, In case of a contractor implementing many projects simultaneously, to overall liquidity situation of the contractor. This brings about many benefits including:            insures that projects with large negative cash flows do not compound each other. Upon contrast, when surplus cash is available, the method utilizes this cash in scheduling additional work.        Helps contractors make key decisions regarding bidding for new projects, determining construction rates, and specifying optimum commencement dates of new projects.            4—Helps owners adjust the profile of financial commitments to contractors to suit their capabilities. When bids are awarded, owners can ask contractors to estimate the progress payment requirements along the project duration. Then, owners can ask for a schedule that produces a desired progress payment requirements scheme that serves financial interests.